Get Smart! 10 Ways to Beat the Competition

IHRSA Tip - February 14, 2006

On July 1, 1995, there were approximately 12,500 commercial fitness centers in the United States. By January 1, 2006, there were more than 29,000 such centers. Today, in most major metropolitan markets, every commercial fitness facility has 10 to 25 competitive fitness operations within its trading area. This one fact - the intensification of competition - implies that the entire fitness industry has entered a new and more demanding era.

How can you set your club apart from the competition? Consider the following suggestions.

1. Get Fresh. "Store Blindness" is an affliction that besets everyone who lives or works in the same space, day after day, month after month, year after year. After awhile, we don't notice the worn carpets, the tired colors, the musty smells, the stale coffee, the dirt, the grime, the messy staff rooms, the clutter behind the front desk, etc. But anyone who walks into a club for the first time and sees it with fresh eyes, ears and nostrils will notice these things. Whenever a strong competitor enters the market, it is imperative that clubs undergo a 360-degree examination from the perspective of the first-time visitor. It is imperative to "get fresh," i.e., update one's image, so that the experience of being in the club is not an experience that is locked into the 1970's, 80's or 90's.

2. Get Connected. "Connectivity" may be the number one advantage that existing clubs enjoy over powerful, new entrants into the market, so it needs to be leveraged to the hilt. "Connectivity" refers not only to the relationships between members and staff, but just as importantly, to the relationships among members. "Connectivity" is the basic reason why some neighborhood restaurants and coffee shops that may have flawed operations succeed year after year. Like those, this business is all about connectivity.

3. Get United. Many club owners and managers say they never knew how well they could perform until they were faced with an imminent threat from a new club. Whenever a new competitor announces its entry into your market, you have an opportunity to unite your staff in the pursuit of a higher level of performance and excellence across the board. Smart club managers do this. Not only do they unite their team leaders, but they also unite their smaller teams - front desk, sales, group exercise, and personal training teams - asking all of them to raise their performance to higher levels than ever before. The advantage of such external threats is that they can unite your staff in the pursuit of better performance. In such circumstances, your team - motivated and mobilized - becomes the ultimate asset, the ultimate weapon with which you can win the war.

4. Get Serious. This term has two implications. First, whenever a powerful new competitor enters the market, it is no longer "business as usual." Both the staff and the members expect to see signs that the ownership and management of the company will step up to the plate and make whatever replacements and/or improvements are necessary to present the strongest possible defense/offense against the new competitor. These replacements/improvements are often items that might otherwise have been delayed for years. Second, "get serious" implies that this is the time to expunge from the staff any personnel who are not totally on board with a united effort to raise the level of performance to heights never before achieved.

5. Get Receptive. Now is the time to ask your staff and your members for their input as to how you can improve the club and better serve your customers. As you do this, leverage your staff members' creativity and passion for the business to the hilt. Invariably, they will think of ways to improve your operation that you might not otherwise conceive of. Some of these items may not cost a dime, but may be worth their weight in gold. Make your staff members feel that their opinions count. Their loyalty and commitment to your business will help it rise to the roof.

6. Get Positive. While this is easier said than done, staying loose, positive, confident and bullish on your future is never more important than when your ship is being buffeted by the storms of competition. Your staff needs to feel your drive, your confidence, your commitment and your plan to win. Never grouse, blame, or go negative -either toward your own team or toward your competitors. The moment you complain about a competitor is the moment that bespeaks fear, defensiveness and a lack of confidence. None of these emotions build confidence in those with whom you work. It is in situations such as this that true leadership rises to the top.

7. Get Clear. This is the perennial issue of company identity. This is - for almost all club operators - not the time to abandon this identity, whether it be as a family club, an adult fitness center, a low-cost provider or an upscale facility. Rather, this is the time to STRENGTHEN AND CLARIFY that identity. Yes, this is a time for innovation, but optimally, it should be innovation that strengthens your identity rather than betrays, abandons or compromises it. The goal is to add value rather than to retreat - and to play offense, rather than hunker down in a defensive position.

8. Get Sharp. In the words of Stephen Covey, "sharpen the saw." Invest in sales, service and hospitality training. Help your people "be all that they can be." Because of the new market entry, it is likely that at least for awhile, your club's fresh "leads" will diminish, which means you will need to score a higher "closing percentage" on those that you do get. Keeping every member also becomes exponentially more important, so it is crucial that your staff's hospitality and service skills be honed to a higher pitch.

9. Get Real. Never put your head in the sand and say to anyone that the new competition will not affect you. Every competitor takes a slice of the market. It may be a small, marginal, or temporary slice - but it's still a slice. Maybe it's only 50, 150 or 250 members. But at most clubs, it's that final 10%, 15% or 20% of the members that constitute 100% of a club's profitability. Losing just 10% of the membership can mean losing 100% of your profitability. The stakes are high, and any one competitor can spell the difference between life and death. Take every competitor seriously.

10. Get Partnered. Clay Hammer, one of the great consultants to this industry in the 1970's and 1980's, never tired of repeating the phrase "same bed, same dream." This was his way of saying that one of the best ways to energize your team to mount an all-out counter-offensive is to create incentives and reward each team member for "partnering" with you in achieving desired results. As a leader in your company, you don't want to go into battle alone. You want your entire team to be as committed as you are. To achieve this, put some financial incentives on the line, so that when you win, they win, too.

Calculate your retention value

See for yourself how improving your retention rate can increase your revenue. Enter your current number of members and the average monthly fee. By adjusting the percentage retention rate you can see how much difference even a 10% improvement in retention can make.